Anti Gravity

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The stocks that we have been trading / investing in have been defying gravity for weeks. The fact that we are catching them right at the lows gives us time to enjoy the ride and nit worry about a short term pullback. So far, a short term pullback is rather hard to come by. Lets review the markets and look for more set ups.

SPX – It may be early in the investor cycle, but this doesnt look ready to power higher to me. I expect the markets to fail at resistance, at least short term.

SPX 3-7

We have been watching Oil intently and we’ve been catching some anti gravity oil stocks too.

WTIC – Oil has a solid double bottom break out, and people still do not believe this move. That often adds fuel to the fire ( More shorts  must cover).

WTIC 3-7.

I have been saying that NATGAS was not a good bottom until it shows a sign of strength, or some how proves itself.  This is promising, so a position could be taken and it is low risk when you place your stop below recent lows. I know many here trade UNG or UGAZ.

NATGAS 3-7

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GOLD –  Gold could easily use this consolidation as a launch to $1308 or $1383 as shown on my chart here in the weekend report.

GOLD WKLY 3-4

GOLD WKLY 3-7 – This shows a drop or a pop scenario , since the Gold C.O.T. is getting a bit bearish. Gold actually looks very bullish in this current consolidation, as I will point out in a minute.  A POP to my targets would be easy from here. There are still a good number of bears out there in the trading blogs calling this a bear market rally. Thats a bullish indication.

GOLD 3-7 b

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The consolidation in Gold is healthy, as it bores people to death, it also relieves overbought conditions and sentiment. I will use AGI as an example of how many Miners are doing this. This consolidation bores people to death  ( I owned it, I know  🙂  ) Then it breaks out and finishes the run. Many are doing this.We saw this with SWC, TRQ, EXK, PAAS, etc etc , and then they broke higher.  Miners often lead the way.

AGI 3-7

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GDX –  You can see that even the GDX is consolidating and looks like it could continue a run higher.

GDX 3-7

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SILVER–  people want to know whats wrong with Silver, but I think it is a bullish set up, as shown, and Silver Miners have blasted off too. lo0k at CDE, AG, HL, FSM, PAAS, ETC. Their bases and upside potential is clear.

SILVER 3-7

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REVIEW

So we have been riding Miners out of the lows from Mid January, and I recommended selling some, riding a partial position on the way up.  This is in case we got a pullback , and also to lock in some gains as we watch how they move going forward. Some as individual stocks have continued higher and others consolidate. 

I then switched focus to commodity stocks like X, CLF, AKS, ZEUS, CENX, VALE, etc.  They too are rocketing out of lows and not pulling back very much once they leave their bases, but they are extended and may consolidate or pull back too. So I have been selling on the way up.

As these various sectors that have been sold off to extremes begin to leave their lows, we are seeing bases and bullish bottoming patterns that can really launch stocks in a big way %-Wise.   Oil stocks are now in that category, and we have traded those for over a week too.  2 of the stocks recommended yesterday ( or last Friday in the comments) were up 70-80% each yesterday alone  ( ARP, BBEP, LGCY).  Throw $1000 on it and you walk away with $1800. Rare opportunity here.

Sometimes selling and locking in those gains is the best thing that you can do, but I want to show you the bigger picture and let you decide how to sell your positions.

THIS IS WHY I ONLY SELL A PARTIAL ON THE WAY UP  

ZEUS had already gone from $8to $12, but the set up tells me that it can run for $20, So I posted this  base and compared it to NEM & ABX.

ZEUS 3-2

 ABX –  The break from the base is excellent.

 ABX base

ZEUS NOW – Running up toward that $20.

ZEUS 3-7

 SO I am trying to show you the move from the base , as big as they have been, can continue. Look at these weekly charts for example.  Notice the Move from the base on our commodity stocks.

VALE wkly 3-7

X WKLY 3-7

 Now – we see these moves in ENERGY and they are breath taking moves. Some of our stocks are up over 100% in days.  Look at ARP, BBEP & LGCY yesterday mid day. They went even higher.

Should I sell?  Well, no one should hinder you from locking those types of gains in, but notice this point…

ARP 3-7b

BBEP 3-7

LGCY 3-7

When I look at the weekly,  they are not even close to what X, VALE, CENX, Etc have done moving up from their bases.  They look like tiny moves just starting. So I may sell partial when I want to lock in profit, but I do like to let these run a bit too. These particular bases can be explosive!

LGCY wkly

BBEP wkly 3-7

 

Its not wise to recommend buying one after they are up 70% in one day, but are there some laggers that may be ready in OIL?  Yes.  STRICTLY BASED ON TECHNICAL ANALYSIS ( Not fundamentals) I like SUNE, PQ, SXE as having proper set ups, but lagging a bit.  Do DUE DILIGENCE.   If they have had earnings released already, it is safer.

 

SXE – THis has started the move, it’s up 100%, but…

SXE 3-7

SXE WKLY – Room to tun for sure. A break out here has tremendous upside if the company can recover.

SXE wkly 3-7

PQ – I mentioned that I bought this one yesterday at $0.57 area, it is still there. Strong divergence in this base.

PQ 3-7

SUNE –  A sign of strength and a back test allows a lower risk entry.

SUNE 3-7

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SON OF GUD made an interesting observation yesterday and posted this in the comments section, in case you missed it .  Some stop at the 200sma, but it may just lead to a consolidation to break through, since others are just breaking through. It was a good observation for our Oil stocks.

COMMENT

Also BILL mentioned Uranium stocks a few times and bought URRE.  That is a good set up.  If you get a chance to read the comments/chat section below the reports,  there are some good ideas there at times. 

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 I am running late due to a glitch in the website, so I want to release this portion of the report by 9 a.m., before the market opens.   I also see other sectors setting up, and they may also rocket out of lows, and I wanted to  discuss that. I will add that to this report,  please check back later and refresh this page.  You will not get a separate email alert.  I will post in the chat area when I am finished.

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No time to proof read, and I’m hurrying, please excuse typos and weirdly phrased sentences  🙂   And Thanks for your patience this morning. This delay has only happened 2x in my 2 yrs of posting.

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~ALEX

 

For those not wanting low priced energy stocks, I still like CNX and DVN. They are slow and steady.

DVN 3-7

CNX 3-7

In the report at the SILVER part, I meant to throw this chart of EXK  in as an example of the solid bases that have formed in Silver stocks when I mentioned  EXK, HL, PAAS, AG,FSM, etc.  Looking back later, we may see that EXK ran from $1 to $6,  time will tell.

EXK 3-7

ALSO CLD –  this energy stock also may be ready to break out higher. Its a semi slow mover that has almost doubled, but it may really take off if it gets above $2.25.  A reasonable stop should be used.

CLD 3-7

 

SO I was mentioning that other sectors also seem to be perking up, and in past reports I pointed out that I am watching the action in Solar stocks and Shippers. Well,  The shippers are taking off too now.

I put this in yesterdays report.  Did anyone see EGLE after that??  You can look these names up, and I will post some charts here.

SHIPPERS

Lets take a look at what is happening in that sector. I am just going to lay out some bullish looking charts with the thought that this area may be the another good runner along with Oil stocks.

SALT & SBLK  as mentioned above – have started breaking out higher.

SALT 3-7 run

SBLK 3-7 run

GNK Broke out yesterday, up 52%.

GNK DAILY 3-7

GNK WKLY –  The wkly chart looks like there is more upside in the long run. 14 wks of selling on the left side, there is probably minimal resistance in that area.

GNK WKLY 3-7

HERO –  Also minimal resistance from the selling on the left side. Up 45% with huge volume.

HERO wkly

TOO  (  See also TNK, TK)

TOO 3-7

STNG –  Inverse H&S

STNG 3-7

 

Lets face reality here.  We are getting spoiled to death here with these big moves.  I’m upset when my stock only goes up 25%.  I used to LOVE IT when NUGT did that.    These moves cant last forever, but they sure are putting on a show here, as they continue to defy gravity.  I am using strictly technical analysis to point out proper set ups, due diligence is important if you want to enter a trade.  Put the ticker in Yahoo finance and see when the earnings come out.  If they already did, the losses are likely baked in to the cake,  and buyers may be looking forward to a better quarter to come  ( plus short covering).   Then you can have your cake and eat it too.  ENJOY!!

 

98 replies
  5. chartfreak1
    chartfreak1 says:

    Looking at LGCY, and maybe it’s too soon, but it bounced off of the 50sma .
    It makes it low risk to add there and stop out under the 50sma, but I don’t like the gap below it.
    .
    refresh for 2 charts

    /.

  6. Bill
    Bill says:

    I’m stopped out of a lot of positions. That was a shocker at the open. Waiting for your lead Alex on when to get back in. Still have LGCY, PQ, URRE and HK,

    • Peter Castillo
      Peter Castillo says:

      Bill, some of these are really looking good on a longer term horizon. BAS, HK, SALT, URRE, ECA… at some point there had to be some form of profit taking, but some of the names Alex has thrown at us have very nice bases or bullish wedges in the weeklies. Not liking today, obviously, but holding to see what takes shape next. I think soon we see energy and spy break the trend and go in different directions, similar to gold and spy in 2011. It’s easy to get used to 10-50% up days, but the consolidation part of the move is what speaks loudest. We’ll see what happens next. The one stock i did get rid off this a.m. was STNG. Don’t like the look of the weekly, too much resistance above. But keeping the rest.

    • Cason
      Cason says:

      Sorry to hear. I stopped out of last 1/3 of UPRO – wanted to, it was just the end for that trade. Stopped out of 1/2 position in WPX for a ~12% gain. I knew my stop was above support but I wasn’t willing to go back to break even. I’ll just re-enter!

  7. chartfreak1
    chartfreak1 says:

    Yes, I sold some at the open just because they were extended and had a lot of downside potential ( ARP , BAS) but I want to buy back in. It usually takes time to allow one to see how it will play out. They can drop, pop, and drop again. If you buy that 1st pop, it hurts.

  11. chartfreak1
    chartfreak1 says:

    I am going to try a day trade trick here, and you can watch me real time succeed or fail 🙂 ( Refresh)

    Minimal downside risk – Good upside possible for a scalp. $ 2.80 or $3.00 if I’m greedy.

    BAS on a 15 minute chart. Bought for a bounce, I will allow it to drop a bit more , but the volume selling is drying up, so I think I may get a bounce.

  12. chartfreak1
    chartfreak1 says:

    Bill,

    Remember when I discussed ROYL, and how it moves well. Its still going. ( I need to go and babysit my day trade).

    6 cents in January. 55 cents today .

  14. Mscrystal
    Mscrystal says:

    Hope this isn’t irrelevant
    to the discussion- feel free to flag 🙂 – TREE had an amazing ER- I also like LC, with a tight stop just under $9. (Sorry I don’t have a chart) Financials are a sector that might be picking up. Good to have a few in the mix. Fed meets next week, so this could heat up. Again, happy to restrict my comments to commodities. new kid on the block.

    • Cason
      Cason says:

      no kidding. In regards to the above, I’m ready to hold maybe intermediate term but not long term, oil still too unstable for me in that regard. Also the way these popped there is too much ‘air’ btw current price and support so I’m letting myself stop out with profits above support on those overextended. I’ve given gains up before and I’m not doing it again even if I miss the next move. I can re-enter.

      • Peter Castillo
        Peter Castillo says:

        Thanks for the feedback Cason! I guess thats where being “new” to the way Alex trades is where I need to adjust. I’ve posted before that I like stocks that are breaking above resistance like a 50 day sma, and follow the action from that point. The better choice would be stocks breaking above their 200/250 day sma, that way there is plenty of potential support beneath. Alex finds stocks that might be basing, regardless of where it is relative to a intermediate/longer term mov av. That works fine if you are trading and know exactly where/when to get out. Maybe with a trailing stop? Again, since I’m not a “trader” per se, some of these moves are hard for me to react to, either because they are extended above, or below a moving average. Not that a moving average is the end all-be all, but it adds a line in the sand where you look for a strong or weak reaction. I guess I can best narrow it down to one question: following a more “active” trading approach, like I think many do here @ CF, would it be the best strategy to place a 10% trail stop when entering a position?? Since I am more interested in the weekly perspective, I see that some of these names have pretty good looking charts, and am starting to like them mayne a little too much, not because of the “pop”, but more because of the bases and wedges that they have built. How do you do it Cason?? And are the results any better than hit or miss or sitting at a craps table????

        • Cason
          Cason says:

          Actually, I do enjoy playing craps once in a while…

          Peter, I’ll give you a couple of my observations, but you have to do you – trade your plan at the end of the day. So, this took WAY too long for me to figure out – but when buying ‘before the pop’ or when beaten down, be careful and WATCH THE TREND. So, for the last two years, gold/miners were in a bear market. We would hit an intermediate low and it would bounce but I wanted to wait for it to get over the 20-day or the 50-day or the…(doesn’t matter) and then I would buy the breakout. Guess what I did? I bought the top. The exact top to the penny. Every time. The other issue and Alex will speak to this is the mid-water case where stocks are way over their support/moving average but not at a target yet – if you buy it’s not low risk b/c a real stop (based on support) will be way too much to lose. You can do the set amount – up to 10% for a stop but then you just end up losing the 10% and watching it bounce off of support and then take off a 2nd time without you. 😛

          The other issue I ran into – trying to take a ‘swing’ trade when it wasn’t there – when it was too low risk. I was holding too long. You may want to swing NUGT. You just can’t always do that; certainly not in the bear market we just exited. So last fall, I got ‘more tactical’ – get in, get paid, get out. Does that mean, I don’t have long term holds? No. But I (FINALLY) realized the market had gotten more volatile and that until we could prove gold and oil bottomed, I was better off to get a few % and lock it in. Final – if you like CFs idea of selling 1/2 on the a solid pop to lock in, do it, it works. But you have to buy a large enough piece to do that. I’m fairly low capital so sometimes selling 1/2 doesn’t do much for me. So, I have to have the PLAN to do that before I enter the trade. Ok sorry I also got long – just some of the things I’ve learned here in CF-land.

  19. Peter Castillo
    Peter Castillo says:

    Alex, for those of us that are not day traders, or traders even, but more investor/speculators that look for trending moves that last weeks to months, would you still see as viable holding some of these names for longer term? HK, DSX, ECA, PQ, SB, for example. Some of those have seen the big pop, now drop. For a short term trader interested in being at his monitor it would be easier to manage I would think, but for those of us that don’t? I usually stick to the etf’s or the 3x’s, but I sold some of my ERX and bought into some of the energy names that you’ve posted which outperformed going ↑, and now underperform going ↓. So again, not to hold our hand with this, but if you do see some of these as longer term holds, what would make you change your mind?? Would you hold them if the major indexes start behaving negative?? I appreciate the input!!

    • Peter Castillo
      Peter Castillo says:

      I should add that I’ve gone over those weekly charts and I do like the way.they look longer timeframe. As a matter of fact, of all the tickers you post, I’ll go into them and only put $$ in those with a longer base or bullish wedge, and preferrably above the 50 day sma, or 10week sma. That way I have a definite line in the sand against which to walk away. What makes reading the recent action difficult is that some of these moves have been extreme, so it fits more the type of.moves for traders with a trailing stop, rather than someone looking to hold for more than 2-3 days.

    • chartfreak1
      chartfreak1 says:

      They arent really “trending” yet, but they are off of the bottom and have good promising bases. They could become longer term holds, but ( You asked what would change that), you mentioned mostly energy. Oil breaking down would likely end that

      • Peter Castillo
        Peter Castillo says:

        Thank you for the reply Alex!! I guess we’ll know if oil holds or tanks in the next few days. I show USO as having broken out of its downtrendline, and possibly backtesting as of this week, similar to what XLE did 1-2 weeks ago. I think I’m just having a little trouble adjusting my style to yours. I’m still debating whether I just ride these stocks or place stops or what. I might just sell some and put it back in ERX which I’m more familiar with how it behaves. Good thing is that I was holding a large enough positiin in ERX, and I did not *add* some of these stocks to gain more exposure, rather I sold some ERX and replaced with some of the energy names. But basically kept the same exposure to energy. I still feel we have 1 more push in energy, maybe for XLE to tag the target @64-65, but we’ll see what happens. If the SPY starts going south, who knows how energy will behave. Ultimately I think they go in different ways, like gold and spy 2011, but we could revisit the lows in energy before that happens. Thank you for taking the time to talk Alex, I appreciate the help.

  20. Al G.
    Al G. says:

    Energy took a sh!t today, nothing to big to worry imo, a pull back is healthy especially after last weeks gains of +20% gains. I always do trailing stop loss to maximize earnings minimize losses. Tomorrow is another day.

    • Peter Castillo
      Peter Castillo says:

      Al, what kind of stop do you use? 10% trailing? Once you enter the trade, or after it runs??

      • Al G.
        Al G. says:

        7-10% after it runs I still keep on eye on the stock at times & sometimes adjust but not always. Best for me is set a stop on what price I buy maybe slightly lower than if it takes off trail stop goes in effect.

    • Cason
      Cason says:

      You still in or stop out of everything? I let myself stop out of WPX. If it hits the 8-EMA around 5.21 I’ll re-enter. I LOVE making the same money twice! I am still in ERF. It was slow to rise so it had a ‘mild’ pullback – at least compared to the others. I have a secondary buy (it’s currently a 1/2 position) already in. I kept BAS through the drop but I sold calls against it. I bought my own calls back this morning. At a substantial discount!

  21. Cason
    Cason says:

    Markets – in general, I almost always have at least a small position going on the general markets. If nothing else it is a hedge in my trading IRA for the funds that I carry long-term. I sold the last 1/3 of my UPRO when it stopped out today. I added another 1/4 to my TZA position along with SPY quarterly puts (31 MAR expiry). So, I went from neutral to slightly bearish. I’ve finally learned to start selling out as we near the top and then scale in as the next downleg starts. Instead of late-breaking panic buying – that’s definitely not a good strategy!

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